Instacart Advertising: How to Increase Basket Penetration and Category Share

Instacart advertising has become increasingly competitive over the past 10 months. Since launching its self-serve ad platform last May, many brands have jumped on the opportunity to capitalize on this rapidly growing marketplace.

As the Instacart marketplace matures, it is now crucial for advertisers to think of strategic ways to sustain their competitive edge, gain new customers, and ensure incremental sales growth.

Leading Instacart advertisers know that there are two critical objectives to Instacart advertising: category share and basket penetration.

Category share is the percent of sales your brand has in comparison to your overall product category or aisle. Basket penetration is the percent of baskets on Instacart that contain your brand's product. At Perpetua, we ensure your ad strategy works to grow category share and increase basket penetration even if you don't have access to these metrics.

Note: These metrics are provided by Instacart based on advertising tiers and must be unlocked through incremental investment. [Minimum $10K spend per calendar quarter and 5% re-investment rate of sales into ad spend.]

Importance of New-to-Brand Customers

The value of new-to-brand customers on Instacart is unlike any other e-commerce marketplace. Customers use Instacart repeatedly to purchase their weekly necessities and often refer to the Your Items section to begin filling their basket. "Your Items" contains products previously purchased by a customer meaning once you gain a customer, the lifetime value of that new purchaser is exponential.

Increasing category share and basket penetration is directly correlated with gaining customers that are new-to-brand. At Perpetua, we ensure brands prioritize advertising dollars towards these new customers through a strategic and more granulized approach to advertising.

Category Share

Customers searching for generic, unbranded keywords likely do not have loyalty for any particular brand. This presents an opportunity for advertisers to capture new customers by appearing in top placements for flagship, category terms.

Perpetua allows control over strategies for unique subsets of targets: Branded vs. Unbranded keywords. By setting an aggressive strategy for unbranded (competitor and category) keywords specifically, you can establish a strong brand presence and expand your customer base.

We also recommend setting a distinct strategy for individual keywords to ensure constant visibility for these targets. For example, if you're looking to dominate the chips category on Instacart, you'll want to ensure the bid price for the keyword "chips" and related terms is consistently competitive. This will increase your chances of winning top placements and maximize your potential to capture customers who are in-market for your products.

Bid adjustments set a fixed or AI-powered multiplier on individual keywords, increasing brand visibility for your most important category keywords.

Basket Penetration

There are two key elements to increasing basket penetration on Instacart.

1. Sustain customer loyalty and increase brand validity through top-of-search (TOS) branded keyword placements.

When a customer searches for your brand name on Instacart, they've either heard of your brand or purchased one of your products before. Given that your products appear TOS for these keywords, customers can be reassured of your brand's presence and dominance on the Instacart marketplace. This increases legitimacy and perceived value of your products.

By not targeting branded terms, you risk competitor products appearing before your brand which could potentially lead to customer loss and a decrease in basket penetration.

1. Expand basket penetration through competitor conquesting and category targeting.

Similar to the importance of unbranded keyword targeting for increasing category share, this strategy is also crucial for increasing basket penetration.

Using the native ad console for Instacart, it is very difficult to control and track spend towards unique subsets of keywords (branded vs. category vs. competitor). Perpetua's advanced goals allow advertisers to set a distinct strategy for category and competitor targets.

Track Performance by Segment

After implementing a strong Instacart advertising strategy on Perpetua, it is important to track performance. Perpetua ensures visibility into key metrics such as impressions, clicks, attributed units (units sold), and total attributed sales, making it easy for advertisers to measure and control performance over time.

We also enable users to track these metrics on an individual product or keyword level.

Advertising Optimization for Instacart

Advertisers should be focused on strategy, not tactics. Our optimization software for Instacart advertising empowers brands to think strategically about where to best allocate advertising dollars. Set a distinct Target ROAS and budget for branded, competitor, and category keywords, and ensure advertising spend is focused towards incremental sales and gaining customers who are new-to-brand.

By using our tool, you can implement data-driven insights to propel performance, while relying on Perpetua's always-on optimization to take care of the rest. This approach will ensure category share and basket penetration growth, no matter the size of your business.

To learn more about how you can gain a competitive edge on Instacart with Instacart Ads, email us at hello@perpetua.io